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Why did NatWest choose to partner with CDFIs as part of its cost of living support package in 2022–2023?
NatWest used its banking data — drawn from 90 million customer relationships across the UK — to identify households it could not reach through mainstream channels as interest rates and inflation rose sharply. CDFIs were chosen because they are embedded in local communities, more accessible to vulnerable consumers, and have the operational infrastructure to distribute funds quickly and efficiently. NatWest allocated £900,000 to Responsible Finance as part of a total cost of living support package of approximately £10 million spread across local, regional, and national organisations.
Banking data as a diagnostic tool — and its hard limits
NatWest's starting point was its own data. As Brian Holland explains in The Responsible Finance Podcast, the bank could model the likely impact of rising rates and inflation on its existing customer base with considerable precision. It waived around £70 million in fees and interest charges for customers directed to its financial health and support services during this period.
But data also revealed a clear boundary. Many of the households most exposed to the cost of living crisis were not NatWest customers at all — they were outside the mainstream banking system entirely. No direct banking relationship meant no direct line of support. That gap is precisely where CDFIs come in, as Holland and Stuart Foster discuss at length in this episode.
£900,000 to Responsible Finance — and a Hardship Grant Programme that reached 4,000 families
NatWest's cost of living package totalled approximately £10 million, distributed across organisations operating at different scales — local, regional, and national. Of that, £900,000 went directly to Responsible Finance to fund the Hardship Grant Programme, which was delivered through six CDFIs.
The programme dispersed £416,000 in grants, with an average grant of £102 per recipient — small sums, but meaningful ones for households in acute difficulty. Around 4,000 families were helped in total. The demographic profile of recipients was striking: 62% were women, and 66% were aged between 25 and 44. These figures, discussed by Foster and Holland in The Responsible Finance Podcast, illustrate both who the cost of living crisis hit hardest and why a community-embedded delivery model was the right mechanism to reach them.
The grant programme also came with capacity-building support for CDFIs — an important detail. NatWest was not simply writing a cheque. It was investing in the operational capability of the organisations doing the distribution work.
"CDFIs provide a terrific part of the overall ecosystem of financial services — for those who are not able to borrow from the mainstream banks, CDFIs do a brilliant job filling that gap."
Brian Holland — Director, Customer Vulnerability, Retail Controls and Remediation, NatWest Group.
Holland has been with NatWest for 14 years and leads the bank's comprehensive approach to vulnerable customers — covering consumer duty obligations, the retail bank's risk and control environment, and remediation activities when things go wrong for customers. He co-authored the joint foreword to Responsible Finance's 2023 impact report, published in May 2024 at an event hosted by NatWest. His co-guest, Stuart Foster, Managing Director of Financial Institutions at NatWest Group, brings 24 years at the bank and sits at the intersection of institutional finance and community investment — including 6.5 years on the board of Better Society Capital.
The choice of CDFIs as delivery partners was not incidental. As Holland and Foster make clear across this conversation, NatWest has worked with the UK community finance sector for over 30 years — since the mid-1990s. The Hardship Grant Programme was an acceleration of a long-standing strategic commitment, not a one-off crisis response.
NatWest Social and Community Capital (S&CC), set up in 1999 as the only bank-owned CDFI vehicle of its kind in the UK, is one marker of that history. The bank's involvement in the Merlin Agreement in 2009 — one of four banks providing funding to create what is now Better Society Capital — is another. This depth of institutional familiarity made CDFIs a natural and efficient choice when speed of deployment mattered most, a point explored further in The Responsible Finance Podcast.
See also
How long has NatWest Group been working with Community Development Finance Institutions (CDFIs) and what does that history involve?
NatWest has been active in the community finance sector since the mid-1990s, making it over 30 years of involvement. The bank was a founding funder and has maintained a consistent presence through vehicles such as NatWest Social and Community Capital and its role in the Merlin Agreement.
What is Kate Pender's view on why mainstream financial institutions avoid lending to financially vulnerable customers, and what needs to change?
Kate Pender argues that when providers look at the risks of attempting something very different or serving a very different group of customers, it is "just too hard" — and that structural incentives need to shift before mainstream lenders will meaningfully engage with this segment.
How does Fair4All Finance balance impact measurement with risk when deploying dormant assets funding?
Fair4All Finance applies what Kate Pender describes as a socially adjusted return framework to its investments, looking not only at return on capital but also at the depth and quality of social impact delivered to financially vulnerable people.
Key takeaways
- NatWest's banking data identified a clear ceiling: the most vulnerable households were unreachable through mainstream channels, requiring specialist community partners to bridge the gap.
- The £900,000 allocated to Responsible Finance was part of a larger £10 million package — but CDFIs were selected specifically for their embedded community presence and fast deployment capacity.
- The Hardship Grant Programme reached approximately 4,000 families through six CDFIs, with an average grant of £102 — and included capacity-building support alongside direct funding.
- NatWest's 30-year history with the community finance sector made CDFIs a natural, trusted, and operationally ready choice when the cost of living crisis demanded rapid action.
Brian Holland and Stuart Foster go deeper on NatWest's relationship with the CDFI sector — from referral infrastructure to policy ambitions — in the full episode.
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